Direct Materials Usage Variance measures the efficiency of a company's use of materials in the production process by comparing the actual quantity used to the standard quantity expected to be used.
Frictional unemployment refers to the short-term, transitional phase of unemployment that occurs when individuals are temporarily out of work while moving between jobs, entering or re-entering the labor market.
Generally Accepted Accounting Principles (GAAP) are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements. GAAP is a combination of authoritative standards set by policy boards and common accounting procedures accepted across the industry.
An insurable title is a title to real estate that a title insurance company agrees to insure, signifying it is free from significant defects that could result in financial losses to the owner or lender.
Seasonal unemployment is a type of unemployment that occurs predictably and regularly based on the calendar year, typically due to changes in weather, holidays, and other seasonal events that affect the demand for labor in certain industries.
Structural Unemployment is a type of unemployment caused by a mismatch between the skills that workers in the economy can offer and the skills demanded by employers.
A subsidiary company is a firm that is fully or partially owned and controlled by another company, known as the parent company or holding company. The parent company owns more than 50% of the subsidiary's voting stock, giving it control over the subsidiary's operations and strategic direction.
Total utility refers to the cumulative satisfaction or benefit that a consumer derives from consuming a particular quantity of goods or services.
A U-shaped recovery is a type of economic recovery characterized by a gradual decline followed by a slow, but steady rebound in economic growth, typically measured by Gross Domestic Product (GDP).
A U.S. citizen is any person born or naturalized in the United States and subject to its jurisdiction. This status affords certain rights, privileges, and responsibilities under U.S. law.
A U.S. Savings Bond is a government bond issued by the U.S. Department of the Treasury designed to provide savings and investment options for American citizens.
UCITS are a popular investment structure within the European Union that allows for a single authorization from one EU member state to market the investment product throughout the EU. UCITS are mainly mutual funds and investment trusts that adhere to strict regulatory standards to protect investors.
UK Export Finance, also known as the Export Credits Guarantee Department, is the United Kingdom's export credit agency. It provides government financial support to help UK businesses succeed in the global marketplace.
UKFI was a limited company established by the UK government to manage its shareholding in banks that received state investment during the financial crisis of 2008.
UK GAAP, or Generally Accepted Accounting Practice, refers to the framework of accounting standards and principles that accountants in the United Kingdom must follow to ensure financial statements are consistent and comparable.
An entity established in 2009 as the successor to the Association for Payment Clearing Services (APACS). UKPA manages payment clearing and overseas money transmission in the UK, providing services and facilities to four main operating companies.
An ultimate holding company, also known as an ultimate parent company, is a company that holds a dominating position over a group of firms, including those subsidiaries that act as immediate holding companies for their own subsidiaries.
Actions of a corporation that are not authorized by its charter and may therefore lead to shareholder or third-party suits.
Umbrella Liability Insurance is excess liability coverage that provides additional protection beyond the limits of a basic business liability insurance policy such as the Owners, Landlords, and Tenants Liability Policy.
An umbrella policy is an insurance policy providing additional liability coverage over and above the limits of a basic insurance liability policy. It is designed to provide extra protection.
A union that is not affiliated with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). These unions operate independently, often with their own policies, leadership, and strategies.
The unamortized bond discount represents the difference between a bond's face value (par value) and the proceeds received from the bond's sale by the issuing company, less the portion that has been amortized over time.
The unamortized cost is the historical cost of a fixed asset minus the total depreciation or amortization applied to it up to a specified date. It represents the current book value of the asset in financial accounting.
The unexpensed portion of the amount by which the price paid for a security exceeded its par value with bonds or preferred stock, or its market value with common stock.
Unappropriated profit refers to the portion of an organization's profit that has not been distributed as dividends or allocated for a specific purpose. These profits remain retained in the company for future use.
Unappropriated retained earnings refer to the portion of a company's retained earnings that have not been earmarked for any specific purpose and can be used for general business activities. This is akin to regular retained earnings unless a portion has been set aside for particular uses.
An unauthorized strike, also known as a wildcat strike, occurs when employees cease work without the authorization of their union or outside the terms of the collective bargaining agreement. These types of strikes are typically spontaneous and are not sanctioned by the union leadership.
Economic growth in which certain sectors of the economy grow faster than others, causing economic dislocations or economically risky over-reliance on specific sectors.
An unbiased estimator is a statistical term referring to a method of estimating a population parameter, where the average of several random samples results in an estimate equal to the population parameter itself.
Unbundling refers to the separation of a business or its assets into distinct entities, generally achieved by selling off certain subsidiaries, business lines, or parts of a security. This strategic action can enable businesses to focus on core operations, optimize performance, and better realize underlying value.
In banking, uncollected funds refer to the portion of a bank deposit made up of checks that have not yet been collected by the depository bank. This means that payment has not yet been acknowledged by the bank on which a check was drawn. Typically, a bank will not allow a depositor to draw on uncollected funds.
An uncollectible account is a customer account that cannot be collected due to the customer's unwillingness or inability to pay. Such accounts may be written off as worthless after several collection attempts, although further collection efforts may continue.
An uncommitted facility represents a provisional agreement wherein a bank may lend funds to a company on a short-term basis, though it is not legally bound to extend the specified amount.
An unconsolidated subsidiary refers to a subsidiary undertaking that, while a subsidiary of a group, is not included in the consolidated financial statements of the group.
Uncontrollable costs are expenses that cannot be directly managed or influenced by a specific level of management within an organization. These costs are important for accurate performance measurement and often lead to differing opinions on their classification.
An uncovered option, also known as a naked option, refers to an option contract where the writer of the option does not hold the underlying security or the sufficient cash to cover the position, making it a high-risk strategy.
An undated security is a fixed-interest security that does not have a redemption date. These securities perpetually generate a set interest payment without a requirement for the principal to be returned at a specific future date.
Under-the-counter refers to illegal payments made for scarce merchandise or services, usually in excess of the stated price. These payments are a form of bribery and extortion.
In cost accounting, the situation where an insufficient amount of factory overhead was charged to the products manufactured.
Under-reporting is the improper failure to report accurate income on a tax return, leading to potential legal and financial consequences.
Under-Withholding refers to a situation where taxpayers have insufficient federal, state, or local income tax withheld from their wages, potentially resulting in tax liability upon filing returns and incurring penalties and interest.
In absorption costing, the circumstance in which the absorbed overhead is less than the overhead costs incurred for a period. This adverse variance represents a reduction of the budgeted profits of the organization.
Undercapitalization refers to the state of a company that lacks sufficient capital or reserves for its operational needs, often due to rapid growth. This situation can result in a profitable company struggling to convert earnings into cash to pay its debts.
A segment of the population that experiences prolonged economic deprivation and faces an array of sociological challenges that contribute to and perpetuate their disadvantaged status.
An underdeveloped country is characterized by a low standard of living, an economy primarily based on primitive technologies for farming and manufacturing, and limited industrialization.
People who are not fully employed according to their education, abilities, and experience. Underemployed individuals are not utilizing their full capabilities and talents, which often leads to frustration and disappointment.
Underestimation in the context of taxation occurs when taxpayers pay less tax than they owe, which can lead to underpayment penalties and is often linked to terms such as underpayment penalty and underwithholding.
The underground economy comprises economic activities that go undetected by taxing authorities, often involving barter or cash transactions. These activities include both illegal operations and those that would be legal if recorded.
The term 'underhand' signifies actions that are sly or deceitful, often with an element of secrecy and underhandedness.
An individual who has insufficient insurance coverage to fully compensate for losses in the event of life or property damage.
In finance, an underlying asset is the security, index, or other financial instrument that the value of a derivative is based on. Understanding the nature of the underlying asset is crucial for evaluating and managing the risk associated with derivatives.
Underlying debt refers to outstanding financial obligations secured by collateral, typically used in real estate and securities contexts, involving senior debt or debt of municipal government entities with broader credit responsibility.
An underlying futures contract is the specific futures contract that serves as the basis for an option on that future. For example, an option on a U.S. Treasury bond futures contract at the Chicago Board of Trade (CBOT) would have the Treasury bond futures contract as its underlying future.
An underlying mortgage, also known as a first mortgage, refers to the original mortgage on a property that remains in place when a wraparound mortgage is created.
An underlying security refers to the financial instrument (like stocks, bonds, commodities, or indexes) on which derivatives such as options, futures, or other securities are based. It is the asset that must be delivered when specific financial contracts, like put options or call options, are exercised.
Underpay refers to a scenario in which individuals receive wages that are considered insufficient or below the market value for the job or procedure they perform. This can be due to several factors, including market dynamics, organizational policies, or perceived worth.
The underpayment penalty, also known as the estimated tax penalty, is levied on taxpayers who do not withhold enough tax or fail to make sufficient estimated tax payments throughout the year.
Understandability is a core principle in financial reporting which ensures that financial information provided by a company can be comprehended by individuals with a reasonable knowledge of business and accounting.
An undertaking is any corporate body, partnership, or unincorporated association engaged in trade or business with the goal of earning a profit. Such entities are involved in economic activities and operate in various business sectors.
An 'undertone' refers to a subtle or subdued element in communication or expression, such as a subdued voice or a subtle suggestion. It can influence the underlying message and emotional impact.
An undervalued security is one that is selling below its liquidation value or the market value that analysts believe it deserves. Factors for undervaluation may include an unfavored industry, lack of company recognition, or an erratic earnings history.
The term 'underwater' describes a financial condition where an asset, loan, or portfolio has a value less than its associated debt or purchase price.
In the contexts of insurance and investments, underwriting involves assuming risk in exchange for a premium or facilitating the issuance and resale of securities, respectively.
An underwriter assesses risks and decides whether or not these risks can be insured, setting the appropriate premium charges, typically based on the frequency of past claims. Additionally, underwriters play a crucial role in financial transactions by guaranteeing to buy unsold shares during new issue offerings.
Underwriters Laboratories, Inc. (UL) is a private organization that performs a wide range of product safety tests on fire-protective equipment, electric and heating appliances, wiring, and building materials. The organization certifies products for safety standards and labels them accordingly after successful testing.
A group of financial institutions that collaborate to underwrite a new securities issue, ensuring the initial sale is facilitated efficiently.
The difference between the amount paid to an issuer of securities in a primary distribution and the public offering price. It varies based on issue size, issuer's financial strength, security type, security status, and investment bankers' commitments.
A person whose bankruptcy has not been discharged, limiting their ability to obtain credit and conduct business without specific disclosures, and restricting them from holding certain public offices.
Goods or services sold at the full established price without allowances or discounts.
Undistributable reserves, often termed capital reserves, refer to specific reserves that cannot be distributed to shareholders as per the stipulations of the Companies Act, various statutes, or a company's constitutional documents. These reserves ensure the financial stability and compliance of a company.
Undistributed profit refers to the profit earned by an organization that has not been distributed to its shareholders by way of dividends. Such sums are available for later distribution but are frequently used by companies to finance their activities.
Undistributed profits, also known as retained earnings or net income, refer to the portion of a company's earnings that is not distributed to shareholders as dividends but is retained by the company for reinvestment in its operations, debt repayment, or other purposes.
Undivided interest describes an ownership right to use and possession of a property that is shared among co-owners, with no one co-owner having exclusive rights to any portion of the property.
Undivided profit refers to the portion of a bank's profits that have neither been paid out as dividends nor transferred to the bank's surplus account, as shown on the balance sheet.
The term 'undocumented' can refer to workers without immigration documents or products/features not described in official documentation.
Undue Influence is the wrongful influence exerted by one person over another, to such an extent that it prevents the influenced individual from acting according to their free will, often leading to the nullification of legal documents like wills or the invalidation of gifts.
An unearned discount is an account on the books of a lending institution that recognizes interest deducted in advance from a loan. This interest will be taken into income as earned over the life of the loan.
Unearned income refers to income that is not derived from active work, such as wages, salaries, or professional fees, but from investments, savings, or other passive sources like dividends, interest, and rental income.
Unearned income or revenue is income received by a business but not yet earned. It is typically classified as a current liability on a company's balance sheet.
Unearned increment refers to the increase in the value of real estate that occurs without any effort or investment from the property owner. This often results from factors such as population growth, economic development, or improvements in the surrounding area.
Unearned interest refers to interest that has been collected on a loan but cannot yet be counted as book earnings. This situation typically occurs with prepaid interest, which is taxable upon receipt by both cash and accrual basis taxpayers.
An unearned premium is an insurance premium that is paid in advance for coverage that extends beyond the current accounting period. If the policy is canceled before the coverage period ends, the insured is entitled to a refund of the unearned premium.
Individuals who are not employable due to a lack of skills, education, and experience, often resulting in chronic unemployment.
The unemployed labor force consists of the portion of the population that is not employed but is willing and able to work and is actively seeking employment.
Unemployment is the state of being without paid work, though willing and able to work and actively seeking work. It also refers to the proportion of the labor force that is without paid work.
Unemployment compensation refers to the benefits provided to individuals who are unemployed through no fault of their own. These benefits are typically taxable and can come from various sources, including state agencies and special government programs.
Learn about the Unemployment Insurance Tax which is deductible as a business expense for employers and understand its implications and relation to the Federal Unemployment Tax Act (FUTA).
The unemployment rate represents the percentage of the civilian labor force that is actively looking for work but is unable to find jobs. This rate is compiled by the U.S. Department of Labor, in cooperation with labor departments in all states, and is released to the public on the first Friday of every month.
Real estate with free and clear title; property owned in fee simple, meaning there are no liens or encumbrances affecting its ownership or title.
Unethical behavior or practices refer to actions or conduct that are not in accordance with the established standards of behavior within a business or profession. Being unethical can encompass a wide range of actions that violate moral principles, legal standards, or rules of conduct set by governing bodies in various fields.
The balance of an item of expenditure that has not yet been written off to the profit and loss account, representing the value of goods or services that will provide future economic benefits.
Unfair competition encompasses acts or practices of businesses that lead to consumer deception, misappropriation of trade symbols, and violations of trade practices laws that ultimately result in the unfair gain of market advantage over competing entities.
Illegal union or management labor practices. The National Labor Relations Board (NLRB) determines whether a particular labor practice is an unfair labor practice subject to court appeal.
Unfair labor practices by unions are specific actions prohibited by the Taft-Hartley Act of 1947, designed to protect workers and employers from coercive or discriminatory actions by unions.
An unfavorable balance of trade, also known as a trade deficit, occurs when the value of a country's imports exceeds the value of its exports. It indicates that a country is purchasing more goods and services from other nations than it is selling abroad.
Unfavourable variance, also known as adverse variance, indicates that actual financial performance is worse than the budgeted expectation, resulting in lower profits or higher costs than anticipated.
Any investment income received by a company that did not qualify as franked investment income, mainly impacting the tax treatment of dividends.
In economic terms, to unfreeze means to remove restrictions, often related to price controls or import/export bans, allowing for market adjustments based on supply and demand.
An unfunded pension or profit-sharing plan refers to a financial arrangement that does not meet the minimum funding standards. This could pose potential risks to the beneficiaries of such plans due to the lack of adequate financial backing.
An unfunded pension system, also known as a pay-as-you-go pension system, is a retirement plan where current workers' contributions are used to pay benefits to current retirees.
